Sunac China (1918) H1 2026 earnings summary

Executive summary

• Revenue for H1 2026 was RMB16.35 billion, down 18.2% year-over-year, mainly due to a sharp decline in property sales and delivery area amid a continued real estate downturn.

• Gross loss increased 9.6% to RMB2.28 billion, with a negative gross margin of 14.0% due to lower sales and higher impairment provisions.

• Loss attributable to owners was RMB12.54 billion, a slight improvement of 2.1% year-over-year.

• The company resolved listed-level debt risks and completed most guaranteed home deliveries, shifting focus to onshore debt resolution and asset revitalization.

• The auditor issued a disclaimer of opinion due to significant going concern uncertainties.

Financial highlights

• Contracted sales (including JVs and associates) fell 56.5% year-over-year to RMB10.25 billion.

• Property management revenue was RMB3.17 billion to RMB3.22 billion, down 9% year-over-year, with profit attributable to owners up 2% (71% excluding one-off disposal impact).

• Cultural and tourism revenue dropped 15.7% to RMB1.83 billion, with strong visitor traffic but weak spending.

• Total borrowings at June 2026 were RMB186.18 billion, down from year-end 2025.

• Total cash (including restricted) was RMB9.78 billion, down from RMB12.01 billion at year-end 2025.

Outlook and guidance

• Strategic transformation towards “asset management + asset operations” with a focus on business model upgrade and debt risk resolution.

• Plans to expand third-party property management, develop asset management platforms (funds, REITs), and promote synergistic asset-heavy and asset-light operations.

• Continued efforts to resolve onshore debt, revitalize assets, and introduce new funding sources.

• Management expects continued operational and liquidity pressures due to market downturn and high debt.

• No interim dividend declared for H1 2026.